Reference no: EM131973717
Analyze the following scenario:
The Boomer Bangs projects presented to the Strategic Planning Committee were accepted for production and roll out by the company is scheduled for January of 2019. The first product scheduled for production is a pill that helps reduce blood sugar levels. Market studies predict that this pill likely will be the most successful of the three products, which is why it is the first product to roll out.
Upper management decided that Luis Montego of the Los Lunas, New Mexico Branch Production Team will take the lead for this project. The plan is for Luis to serve as a model for organizing that will be copied by the rest of the branches so that roll out can be concurrent. Luis knows that his production floor is set up exactly like the rest of the plants. Luis has put some thought into the fact that the new pill production will require additional production lines requiring changes to the existing set up. Luis believes space could be a problem. Luis estimates he will need 200 sq. ft. for the additional line set up. He will also need two conveyor belts as well. Luis knows that some relocation of machinery or line set up will have to be done because pills have to be produced away from direct sunlight and stored at low temperatures.
Luis has also come to the conclusion that he will need additional personnel - one pharmaceutically trained pill machine operator for the day shift and two operators for the night shift. Trained line workers cost $3 more per hour than untrained line workers. Luis also knows that these new workers will need supervising. He may have to restructure the floor staff.
Primary pill ingredients bitt goud, spreading hogweed, Chinaberry (mostly found in India) and burra gokhru will be shipped from Madras, India. However, sourcing of the Chinaberry has been a little difficult for Luis and he suspects the cost of production will have to increase the estimated R&D cost by $0.075 per pill. Additional labor costs and costs of the rare Indian ingredients places the overall production cost of one bottle of 60- pills at $5.75, which includes packaging.